Getting on the property ladder: Top tips for first-time buyers in 2013

Getting onto the property ladder has become increasingly difficult for wannabe homeowners - here are our tips for getting one foot on

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For sale: But prices are dropping

New figures show that average property prices in cities such as Hull, Sunderland and Salford were just under £160,000. This is significantly lower than houses in the South and around two and half times the earnings of average local couples.

Property search engine, Adzuna.co.uk, conducted a study of house prices in cities across the UK relative to earnings. Figures show that Winchester in Hampshire was the least affordable city for first-time buyers, while Belfast and Hull were the most affordable in relation to earnings. More than nine in ten houses in Belfast were said to be within financial reach of soon to-be homeowners on local incomes, compared to just one in four in London, Reading and Guildford.

The report found that a typical house in Winchester sells for 8x the local average incomes at £440,000. Houses in Northern and Scottish cities continue to be more affordable than those in the South as the pricing gap widens.

1 - Get Saving

Saving is tough especially as the cost of living continues to rise, wages remain frozen and house prices are picking up again. However, without that all-important deposit you will not be able to get your foot anywhere near a property ladder.

Be smart with your money and work out what you can afford to cut back on in order to save cash. Maybe you could make packed lunches for work instead of spending £5 a day on take-away snacks, coffees and more. This could save you £100 a month, which would help to build a nest egg.

Ditch the weekly takeaways, swap expensive nights out for cheap nights and keep a watchful eye on your spending habits. There are loads of ways to start saving, whether it’s just being on top of and in control of your finances or opening a savings account.

Cash ISAs are the ideal savings account where you can save up to £5,640 tax-free, for the remainder of this tax year. There are loads to choose from, allowing you to manage your savings efficiently as well as earning some interest.

2 - Location! Location! Location!

Where you want to live will have a significant influence on your funding. As mentioned, houses are significantly cheaper in the north. This is why it could be a good investment to look at cheaper properties with cheaper mortgages to pay and work out any commuter costs or relative earnings to see if it would be a move worth making for you.

There are a number of towns outside of major cities where you might find your money will go further. For example, you could be paying the same amount for a two-bedroom flat in a city centre as you would for a three-bedroom property in neighbouring towns.

In addition to this, certain areas and suburbs will be cheaper than others within towns and cities which essentially mean they have their own micro-housing market. If you are moving to a totally new area you might want to investigate which areas are cheaper to live in and why, and if this would be suitable for your own circumstances.

3 - Compare mortgages

There are several different types of mortgages to choose from and it is important that you know which one would be best for you.

For example, interest-only mortgages allow you to pay off just the interest rather than the mortgage itself. This could be ideal at the moment as interest rates remain at a record low, although you could be paying off your mortgage for longer.

Repayment mortgages are good alternatives where you pay a little each month of the underlying debt, as well as interest on the loan. This means that at the end of the term, which is typically around 25 years, the mortgage is completely cleared.

Mortgage rates vary significantly and those on tracker mortgages in particular could see rates rise. Anyone who is with the Bank of Ireland and subsidiary Bristol and West could see the cost of their home loan nearly double because it announced recently that it will increase its Base Rate Tracker Mortgage.